Small business health insurance rates to increase by average of 4 percent in 2018

Health insurance rates for small businesses in Michigan will increase an average of 4 percent for 2018.

The Michigan Department of Insurance and Financial Services on Wednesday released rates for both the small group and individual markets.

While rates for individual health insurance policies sold on the public health exchange are going up an average 26.8 percent with the federal government no longer providing cost-sharing subsidies, the small group market follows trends of recent years with moderate increase and, in some cases, decreases for 2018.

State regulators approved a 6.3-percent increase for Blue Cross Blue Shield of Michigan, which last year had more than 192,000 people enrolled in small group policies.

Blue Cross Blue Shield’s HMO subsidiary, Blue Care Network, received approval for a 0.2 percent increase. Blue Care Network covers more than 89,000 people at small employers in the state.

Grand Rapids-based Priority Health, with more than 40,000 people in the small group market, gained approval for a small group rate increase of 2.2 percent. Priority’s fully-insured subsidiary, Priority Health Insurance Co., which covers nearly 9,000 people, received approval for an 8.4-percent increase.

Sixteen health plans participate in Michigan’s small group market, which covers nearly 412,000 people combined. In West Michigan, much of the market is covered by Blue Cross Blue Shield or Priority Health.

The small group increases are consistent with the moderation that market has experienced the last few years, said Rob Fowler, CEO of the Small Business Association of Michigan. Fowler credits Michigan’s Medicaid expansion in 2014 with a “significant portion” of the moderation.

As the Medicaid rolls expanded, hospitals incurred lower amounts of bad debt that was shifted to people with coverage, which was then reflected in rates of insurance carriers, he said.

In the individual market, the state approved increases of 31.7 percent for Blue Cross Blue Shield and 22.6 percent for Blue Care Network. Priority Health received approval for a 19-percent increase on individual policies.

Approval of the individual and small group health insurance rates comes just days prior to the Nov. 1 start of open enrollment for 2018.